U.S. Defense Firm Buying Israeli Spyware Maker NSO

According to a number of sources with knowledge of the deal in Israel and the United States, the Israeli spyware firm NSO is in talks to be sold to the US defense contractor L3Harris.

Photo Insert: The agreement has yet to be finalized and must be approved by Israel, the United States, and L3Harris' board of directors.

The agreement has yet to be finalized and must be approved by Israel, the United States, and L3Harris' board of directors. The White House is currently concerned about any potential agreement, according to a senior official, the Israeli newspaper Haaretz reported.

This story was co-reported by Omer Benjakob and Gur Megiddo of Haaretz, Stephanie Kirchgaessner of The Guardian, and Ellen Nakashima and Craig Timberg of The Washington Post, and it confirms parts of a report published on Tuesday in Intelligence Online.

NSO is notorious for developing the contentious Pegasus spyware, which can hack mobile phones and give client operators – in the form of states or national intelligence agencies – full access to the targets' devices, including through so-called "zero-click" attacks.

According to sources who spoke to Haaretz, The Washington Post, and The Guardian, if the deal is approved, NSO could be removed from the US Department of Commerce's blacklist – either directly or by having its assets purchased by L3Harris, which will only work with the US and its allies.

According to sources, the agreement will include NSO's client base in the so-called Five Eyes – an alliance of intelligence agencies comprised of the United States, United Kingdom, Australia, Canada, and New Zealand – as well as those in Europe and possibly other NATO countries.

It will also include NSO's software and some of its employees, who are seen as critical to the company's ability to continue hacking mobile devices even as companies like Apple and Google work to patch the vulnerabilities that Pegasus and other types of spyware exploit to gain access to encrypted devices.

"We are deeply concerned," a senior White House official said on condition of anonymity due to the sensitivity of the matter, adding that "such a transaction, if it were to occur, raises serious counterintelligence and security concerns for the US government."

"Without getting ahead of any process, any US company, particularly a cleared US defense contractor, should be aware that a transaction with a foreign entity on the Entity List will not automatically remove a designated entity from the [list], and would spur intensive review," the source continued.

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